I am a journalist for City A.M. reporting on the energy and mining sectors. I also keep an eye on the pharmaceuticals sector and cryptocurrencies. Email: courtney.goldsmith@cityam.com

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Cairn's boss will see a huge reduction in long-term incentives from 2017 (Source: Getty)

Courtney Goldsmith

The chief executive of Cairn Energy received a bumper 61 per cent pay increase in 2016, but the oil firm has slashed potential long-term incentives for future years.

Simon Thomson received £2.1m for 2016 compared with £1.3m the previous year. The jump was mainly down to increases to long-term incentives as Thomson was awarded £961,095 in 2016 compared with £217,975 the previous year.

The Edinburgh-based firm has proposed a new remuneration policy, which, if shareholders approve, will see Thomson's annual bonus opportunity increase from 100 per cent of his salary to 125 per cent.

However, in a move that echoes BP's remuneration policy shake up, the oil explorer said it plans to introduce a new long-term incentive plan which will slash the total annual opportunity from 400 per cent of his base salary to just 200 per cent plus a 50 per cent "kicker", conditional on certain performance metrics.

Jackie Sheppard, chair of the remuneration committee, said: "The committee has formulated a new remuneration framework which is intended to provide a better balance between driving short-term performance and rewarding long-term success."